US Supreme Court to revisit “first-sale” copyright doctrine

The US Supreme Court will debate the reach of US copyright laws. They'll hear …

The Supreme Court agreed Monday to decide the global reach of US copyright law, in a case testing whether an overseas purchaser of a copyrighted work may resell it in the United States without the copyright holder’s permission.

The justices will hear the case, which considers the “first-sale” doctrine, in its next term and is expected to set a nationwide standard. Federal circuit courts of appeal are split on the issue.

The first-sale doctrine generally allows the purchaser of any copyrighted work to re-sell or use the work in many ways without the copyright holder’s permission. That’s why used bookstores, libraries, GameStop, video rental stores, and even eBay are all legal. But how the doctrine applies to foreign-purchased works—the so-called grey market—has been a matter of considerable debate.

In many ways, this is a battle for non-digital goods. Most digital goods, like software, e-books and MP3s—because of licensing or sandboxing—cannot be resold. However, a US startup, ReDigi, is testing that theory when it comes to online music.

Meanwhile, the high court in 2010 said the first-sale doctrine did not apply to overseas purchases of copyrighted works which were imported for resale in the United States. The 4-4 ruling meant Costco could be liable for copyright infringement for selling foreign-made watches without the manufacturer’s authorization. However, because there was no majority decision, the ruling did not set a nationwide precedent and solely affirmed a lower court’s ruling.

Justice Elena Kagan was recused from the Costco case, as she had worked on it when she was solicitor general. She had urged the justices to side with Omega, the watchmaker. The government’s position was that the “Copyright Act does not apply outside the United States.” Costco had told the Supreme Court that the decision effectively urges US-based manufacturers to flee the United States (.pdf) to acquire complete control over distribution of their goods in the American market, arguments now being made in the latest case.

The case the justices decided to review Monday concerns textbook maker John Wiley & Sons and California entrepreneur Supap Kirtsaeng, who was reselling textbooks purchased overseas to US-based students without the publisher’s consent. The publisher sued, and a New York federal jury agreed with John Wiley & Sons’ position that the first-sale doctrine did not apply, and awarded $600,000 in damages for copyright infringement.

If you bought it... its yours. Just sell your stuff for a reasonable price and you wont have to worry about resellers?

Or am I missing something?

Well if the first sale doctrine were to hold up under those circumstances then you would be legally to sell your software, music, and other digital goods. And that's the problem, I don't know if you've heard but a used market kills entire industries

I know it's more complicated then that but as a short sarcastic answer I think it explains it well =P

I understand both sides of the argument, but if digital goods are not granted first-sale doctrine, then the cost to obtain them should be very, very, very low to match your limited rights.

I understand trying to make a compromise but the fact that this doesn't apply just because it's a digital good is a scary precedent and I will only be happy if it's covered under the first sale doctrine or something remarkable close. I should be allowed to sell w/e I purchase digital or not and companies should not be allowed to intentionally break software or degrade it just to keep you from selling it used. It's a joke that it's taken this long to have this debate.

My point is, setting a low price now works but how about when everything is digital, setting a low price just isn't going to work IMO

Regarding the reselling of digital goods, it's only viable if the seller is deprived of the good once sold. If there is no way to assure this, then it isn't good for commerce. If I sell you my copy of Michael Jackson's Thriller then if I get an inkling to listen to it again I need to repurchase it either directly such as through Amazon's MP3 store or indirectly by listening/seeing advertising through a legitimate site such as Spotify.

I understand both sides of the argument, but if digital goods are not granted first-sale doctrine, then the cost to obtain them should be very, very, very low to match your limited rights.

I understand trying to make a compromise but the fact that this doesn't apply just because it's a digital good is a scary precedent and I will only be happy if it's covered under the first sale doctrine or something remarkable close. I should be allowed to sell w/e I purchase digital or not and companies should not be allowed to intentionally break software or degrade it just to keep you from selling it used. It's a joke that it's taken this long to have this debate.

My point is, setting a low price now works but how about when everything is digital, setting a low price just isn't going to work IMO

A "used" digital good has no loss of value/useability like a physical one, so would there be any reasonto buy it "new"?.That would suck for the software maker.

I can understand why they wouldn't want First Sale rights to apply. Usually a corporation charges X in a foreign market, and then wants to charge X + Y% in the US for the same product. If you import from a foreign market then your grey market goods could be sold for less than what the items retails for in the US.

I don't exactly see why this should be illegal, but given that it would hurt corporations, I'm sure they'll rule against it.

A distinct point - when you ;resell' digital item, you are (almost) always selling a copy, even where you are honest and deleting the original. The only exceptions to this would be where softtware/digital copy was tied to physical media (like a CD, DVD, pen drive or hard drive). Short of selling the physical item the software is on (and to me, that should be permissible by common sense, like a physical book being read and sold on), you'd always be making a copy.

As well as the no effect/cost of aging argument already presented, it would also open up a huge potential for fraud if you're going on plain faith that the original was deleted when you bought the copy.

Before someone flags the book example as a problem (as in the story) - I'll add that I was thinking within a single country here. Obviously it'd be even more of an issue for the digital copy being sold internationally.

A distinct point - when you ;resell' digital item, you are (almost) always selling a copy, even where you are honest and deleting the original. The only exceptions to this would be where softtware/digital copy was tied to physical media (like a CD, DVD, pen drive or hard drive). Short of selling the physical item the software is on (and to me, that should be permissible by common sense, like a physical book being read and sold on), you'd always be making a copy.

As well as the no effect/cost of aging argument already presented, it would also open up a huge potential for fraud if you're going on plain faith that the original was deleted when you bought the copy.

Well, with systems like Steam and Origin, selling a used item could be easily done. You open a resale section on them. The online store take a comission on the sale like ebay and the content is removed from the sellers' account and moved to the buyers' account. This way you prevent the seller from playing or installing the game.

This is Retarded ! And we will wonder if SCOTUS sells us all out or sides with the little person.You own a physical item and you want to sell it then you do sell it Used.I have bought many Rare Books, ETC that were used and not all came from USA.Some of the Sellers I bought from were located in other Nations.

Personally, I found that decision on the watches at Costco disturbing when I read about it a few months back. I mean, here was something that was legitimately manufactured and sold somewhere else, the trademark appearing on the physical object valid. They then decided this physical object, which was created 100% legally and with the blessing of the owner of the trademark where it was, suddenly wasn't valid anymore simply because the physical object shifted geographic location from where it was made to where a different branch of the same outfit that okayed the trademark be placed on the good now gets inconvenienced by it? In my eye, blocking that was wrong. VERY wrong.

It would have made sense if there was no connection AT ALL between the company that owned the trademark here and the company that owned the trademark there, if it was two totally unrelated companies that just happened to independently develop the same company logo in two different parts of the world, or if another company deliberately mimicked the other company's logo to cash in in the popularity of the other... basically a counterfeit. But in this case it was the same company, or at least a branch of the same company, that commissioned those watches to be made in the first place. But they wanted to treat these watches as if they were fakes, by misusing a copyright law to block the sale of a physical object that happens to have a logo and brand name on it, and where the object was created by the same company!

If it's a "fake" here, then it's a "fake" there, too. But since it's clearly not a fake there, it should never have been treated like a fake here. They should never have gotten away with essentially calling they're own official creation (by another branch or affiliate of the same company) a fake and a fraud. It's just lunacy.

I don't give a damn how much it might inconvenience the company here that something made by the same company there loses them a small fraction of their income here when some officially-made-by-them object gets brought from there to here. Tough toenails! They made it! It's their product! They can't. and shouldn't, be able to arbitrarily turn around and say it's NOT their product when it inconveniences them!

The "digital goods" distinction betrays a fundamental misunderstanding of the issues. The "digital" part is irrelevant. The "goods" part is what matters. The first sale doctrine applies only to "copies and phonorecords" which, by definition, are tangible objects onto which the intangible work is reproduced. It doesn't matter one whit whether the reproduction was digital bits, grooves in a vinyl record, magnetic impulses on tape, ink on paper, crayon on a wall. The whole point is that the owner of a lawful reproduction (on any medium whatsoever and reproduced by any method or technology whatsoever) is entitled, without the consent of the copyright owner, to distribute that tangible item.

Many people confuse this with reproducing the work onto a separate medium (as is the case in CD burning, copying onto a USB, or downloading / uploading using the Internet. The first sale doctrine applies solely to the distribution of the physical medium (paper, disc, hard drive, shampoo bottle, plastic bag) onto which the intangible copyrighted work was lawfully reproduced. It does not give any right to make additional reproductions.

I don't understand why it even has to come to First Sale. Why would a foreign copyright even apply here? (I realize that there are treaties, etc, but that doesn't make it right)

If I understand correctly (IANAL), copyright applied, at least in the CostCo/Omega case, because Omega argued copyright infringement of the logo on the watch, not trademark infringement, which put it under a set of legal standards more in their favor as far as international laws are concerned.

Either way, since it was be treated as sale of a copyrighted work that was not produced in the context of US copyright law, First Sale did not apply.

If Omega can get this kind of legal BS to stick with a watch, I'd imagine a book, which is more clearly in copyright territory, will have the same outcome as CostCo/Omega case.

When you have an activist conservative majority court who seems to be on a mission to "make their mark" then stuff like this shouldn't be surprising. The conservatives know that Bush's 2 appointees has tipped the scales and they certainly aren't shying away from anything. This court is going to affect the US for decades to come and they know it.

I can understand why they wouldn't want First Sale rights to apply. Usually a corporation charges X in a foreign market, and then wants to charge X + Y% in the US for the same product. If you import from a foreign market then your grey market goods could be sold for less than what the items retails for in the US.

I don't exactly see why this should be illegal, but given that it would hurt corporations, I'm sure they'll rule against it.

Emphasis mine.

Doesn't this then mean that the retail price of the product in question is inflated in the US?

Just curious. Textbooks seem to be priced much more cheaply outside the US, and as a result many students now buy from retailers that specialize in international editions of this nature. And pay a substantially lesser amount compared to the exact same product sold in the US.

I fail to see the difference from selling a textbook in India(just as an example) to selling the same book in the US unless the price is subsidized somehow either directly as a result of selling in the US, or from the local government of whatever country the book is sold in. As long as the equivalent value is placed on the book at the time of sale.

Companies really like being able to jack the prices in one country and slash them in another. Disallowing first sale is all about letting them charge you $20+ for a DVD here, and $5 for the same product in another country, without worrying that somebody will just go buy those perfectly legal $5 versions and then sell them here for $10.

So they want to make first sale go away, in order to keep gouging local folks, on the basis that american laws don't apply in other countries... yet the US has, in most every other case, decided that it's laws apply everywhere in the world.

Doesn't this then mean that the retail price of the product in question is inflated in the US?

Just curious. Textbooks seem to be priced much more cheaply outside the US, and as a result many students now buy from retailers that specialize in international editions of this nature. And pay a substantially lesser amount compared to the exact same product sold in the US.

I fail to see the difference from selling a textbook in India(just as an example) to selling the same book in the US unless the price is subsidized somehow either directly as a result of selling in the US, or from the local government of whatever country the book is sold in. As long as the equivalent value is placed on the book at the time of sale.

It allows for that, as well as regional delays and regional censorship. I hope that some briefs do focus on the censorship issue, because bringing clear cut first amendment concerns into it could really undermine the case against the first sale doctrine.

I don't understand why it even has to come to First Sale. Why would a foreign copyright even apply here? (I realize that there are treaties, etc, but that doesn't make it right)

If I understand correctly (IANAL), copyright applied, at least in the CostCo/Omega case, because Omega argued copyright infringement of the logo on the watch, not trademark infringement, which put it under a set of legal standards more in their favor as far as international laws are concerned.

Either way, since it was be treated as sale of a copyrighted work that was not produced in the context of US copyright law, First Sale did not apply.

If Omega can get this kind of legal BS to stick with a watch, I'd imagine a book, which is more clearly in copyright territory, will have the same outcome as CostCo/Omega case.

Exactly, How can they claim violation of copyright when it's something that their own company produced in another part of the world? Yes, it bothered me a whole bunch that they were able to MISuse copyright law over what was purely a trademark issue. And even if it was a copyright issue, they manufactured the watch themselves in the first place! Or, at least subcontracted it to another company to do it, but it was their company that designed it, initiated it, and shipped it.

Edited to add: But on the other hand, I DO think it is wrong to block the sale of books printed in another country if the books are legitimately produced under copyright license in the other country. It should only be an issue if the books were produced outside of copyright in the country of origin, that is, if in the country they were printed they were pirate copies.

If you bought it... its yours. Just sell your stuff for a reasonable price and you wont have to worry about resellers?

Or am I missing something?

Well if the first sale doctrine were to hold up under those circumstances then you would be legally to sell your software, music, and other digital goods. And that's the problem, I don't know if you've heard but a used market kills entire industries

I know it's more complicated then that but as a short sarcastic answer I think it explains it well =P

Agreed. You wouldn't want a free people, in a free society, to have....such......freedom.